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How Do You Consultants Come Up With Those Prices?

While there are some clients that ask this question out loud, it’s my sense that every client asks it even quietly when they get to the part of the proposal titled “Professional Fees.” Often, this section is approached with a sense of dread, as up until this point the prospective client has a feeling that I have something they are interested in buying, if only it fits the budget they have in mind. They have mentally mapped my proposed solution to the problem at hand and are hoping that they will not have to turn their company upside down to find a solution.

Therefore, from time to time in my career as a consultant, I am asked by a prospective or current client to engage in the awkward business of justifying my fees.

“Why is it so much? How did you come up with that figure? Why is it different/more than I thought it would be? Are you guys all a bunch a tief’?”

At first blush, my response is to give an off the cuff smart-aleck answer, like “it pays the rent” or “because that’s what it IS” – with a slight tone of contempt that is related to some vague feeling that they are questioning the value of my existence, and whether or not I deserve to be drawing breath upon this earth.

After I resolved the more basic question of my value to our race, I began to realize that they might be asking because…. they just don’t know, and they think that the knowledge might be useful to them. The truth is, that the setting of consulting fees is a mysterious business, even to the practitioners of the art. Obviously, we’re not selling something that is tangible or can even be compared to what any other person on the planet can provide. For example, part of what makes my work distinct is that I bring first world standards of thinking and tools gained from my years living in the U.S. to the Caribbean, and apply it with an understanding of our people in the region. (Whew) No-one else can do that in the same way, and I cannot do what they do in quite the same way.

But, how does one impute different dollar amounts to the different value? How about the local consultant who is known internationally? How about the foreign consultant who is married to a Caribbean person, but lives in Latin America? Aren’t they also valuable in their own way, and should be charging more, less or the same as I do?

These questions don’t have definitive answers, but as I played around with them, I thought that I should at least be honest about what drives my own pricing, so that I at least have something to say to myself other than “that’s my gut feeling,” when this awkward matter comes up.


So, to lift the fog on my own criteria, here are the rules of thumb I use when coming up with the cost of a project, and the price I charge clients.

1. The Value to the Client

Framework specializes in High-Stake Interventions, and not everything that a client needs or does is high-stakes enough to warrant my interest or attention. There are many more low-stakes opportunities for things like skills training, coaching, facilitation, job analyses, etc. than there are high-stakes opportunities, but we’ve made a conscious decision to stay away from them. In other words, we only get involved when there is a great deal of risk and/or reward involved, and we like both big problems and big bets. This commitment of ours keeps life interesting, which is the way we happen to like it.

The upside of this approach is that the projects we work on are of tremendous importance and therefore value to our clients.

As one might expect, the more critical the project, the higher the price we propose. Typically, on critical projects the costs of failure are prohibitive; people’s careers and futures in the company are dependent on successful outcomes. The same activity (e.g. coaching a CEO) that I will do for free for a friend starting his own business, will not be free to the CEO of the US$500m company, and will cost less than the coaching given to the US$5b company.

Why the difference? Doesn’t a CD player sold to each of these CEO’s cost the same to each one regardless of who is doing the purchasing?

Consulting services are very different, however. Experience tells me that high-stake projects are those that generate the most stress, require the most pre-planning, cause me to lose the most sleep, and are the ones I care about the most because they are so engaging. Also, coaching my friend has little or no downside to my reputation, but there is a greater risk in coaching the big company CEO because, presumably, his or her time is extremely valuable in economic terms, and the decisions and actions to be taken have far-reaching effects.

In other words, the same advice given to CEO’s in different companies has different ramifications and effects, and the price of that advice varies accordingly.

For projects that are not important, routine or are too easy, our preference in Framework is to others, or turn them down flat.

The paradox is that I am in essence saying that I should be paid more to take on greater challenges… now that’s a win-win if I ever heard one, as I there’s nothing I love more than an engaging and exciting challenge!

  1. Delivery, Face and Contact Time

A modifier on the price of every project is the amount of time we need to spend face to face with the client, either in coaching conversations, planning or delivering a course. While there isn’t a tight correlation, it does play a part in our calculations.

For example, delivering a course in front of 50 people for two days is very different than sitting down to have one-on-one interviews, or observing an activity, or strategizing over Red Stripes while sitting at a bar in Ocho Rios. They are all valuable activities, but by far the most difficult activity to undertake, and the one that takes the most preparation and concentration is the 50-person course. That also is the one that is the most tiring, and must be done to the exclusion of any other activity.

Also, there are fewer consultants who can lead a 50-person course effectively, and any number who can (claim to) strategize over drinks. In other words, a consultant is more valuable to the client when they are undertaking unique and specialized activities that few others could do well.

  1. Travel Time

Sometimes we include the time it takes to travel to and from the client, if that is a factor. I turned down a project in Europe recently because the one day that the project required was not worth the 2+ days of travel plus jet lag it would take to get to the site in Germany and then back home to Florida. I’ve never had a client that was willing to be charged for my travel time, unless I was travelling over 12 hours in one rare case.

  1. Phone Coaching Time

If there is significant meeting time on the telephone, then that is factored in also.

  1. Custom Preparation Time and Expertise

If there is something that we have developed that will fit the need exactly, then that is used to modify the price we propose. This is rarely the case, however, as the kind of interventions we do, don’t lend themselves to cookie-cutter solutions (but perhaps one day we’ll figure out how to do that!)

  1. Client “Friction”

One of my prior clients was so difficult to work with, and so chaotic to do business with, that we’ve put a premium on doing work with them. This “tax” is to compensate for the missed meetings, long negotiations, last-minute cancellations, unreturned phone calls, unpaid invoices, etc. that continues to be part and parcel of working with them. By now, you might be wondering why I even worked with such a client – well, to date, they have refused to pay the increased fees caused by the “tax” so they are no longer a client.

  1. Staffing and Training Costs

At times, projects require extra hands, which require additional management. At other times, I must bear the brunt of training someone to work on the project. In both cases, this impacts the cost of the project due to the extra head-ache of carrying another person on my payroll. The extra administrative time required to hire a single other person is just horrendous.

  1. Opportunity Costs

Bluntly put, if I am busy I tend to charge more than when I’m looking for the next project to pay the bills!

Last Few Thoughts

What my more unreasonable prospective clients often don’t understand about business of consulting is that, unlike an employee, they are only paying me to work, and ONLY to work at my absolute best. They are not paying me to take vacation, get sick, get tired, pick up the kids / dogs / groceries / mother-in-law, take off early on Fridays or the days before holidays, do paperwork or anything administrative, pay my taxes, vote, do jury duty, travel to and from their locations…. or even take lunch, in the extreme cases.

They also don’t take kindly to my resisting doing weekend work, holiday work, late-night work or hurricane work.

They also don’t realize that while I’m negotiating with them and waiting for them to make up their minds, I am not getting paid. This gets expensive for me when I encounter prospects that have long decision-making processes, or just like to wait to see if the price that I quoted will come down.

None of these are a problem by themselves, as they are part of the service I’m offering as a consultant in the business of High-Stakes Interventions. The problem comes when a client does not see (or worse, cares not to see) the entire equation.

All in all, one thing I’ve learned over time is that the way a client negotiates says everything about what they will be like on the project once things get going, and that it’s important to define my firm’s boundaries early on in the process. I recall being on a closing call with another consultant and a client, who he later described as a “Taker.” In other words, the client was only interested in how much they could get for themselves and their company, with no regard for my firm’s welfare. “Takers” are trouble, and while I’m not good enough to spot them before every project starts, I am learning to know when to stop doing business with them.

“Takers” are the worst – most are much more sensitive – but I think the average client does want to know where the amount in the proposal is coming from, and do like to know that they are not just being fleeced by whimsical dreams of consumer goods bought with hefty consulting contracts. I think that the better clients would like to know that there is a hard business rational behind every dollar that gets quoted in a proposal, and that when I’m quoting a number for their consideration, I’m responding to the facts of my business, rather than just a need to buy a new car or take a fancy vacation.

As a new consultant, I did not appreciate this fact, and I committed what must be the mistake of every new consultant – that of charging too little.

A relevant analogy and story that illustrate the general point:

  1. High-stakes professionals like surgeons and airline pilots tend to be paid more than others who are sitting right beside them, spending even more time than they are, and possibly working even harder than they are (in physical terms.)

    As a frequent flyer, and someone who had surgery once for adenoid removal, I have no problem paying my surgeon more than the orderlies who pushed me into the waiting room, or my pilot more than the cleaners who remove trash the from inside the aircraft.

  2. I recall the story of the plumber who came in once to fix a complex system of pipes in a major factory. The problem had remained for months, and was starting to create severe problems with the company’s throughput of its main money earner. The plumber came in and after careful thought he reached down into the bowels of the plumbing and tightened a screw. The management was incredulous, but sure enough, that was the correct solution.

    A week later the plumber submitted his invoice for $5000. The plant manager went ballistic and refused to pay. The plumber quietly said he would resubmit the invoice, and he did so one day later with the following breakdown of charges:

Time used to tighten screw: $10

Knowing Which Screw to Tighten: $4990

Total $5000

P.S.

(Of course, I have absolutely no self-interest WHATSOEVER in bringing to mind either of these cases. ;0)

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Everything is War — Bob Marley

These words, first spoken by Emperor Haile Selasse I, were immortalized by Bob Marley in his popular song “War” of 1976.

Selassie, in his speech, was talking about the need for disarmament and racial equality. Today, however, we talk and listen as if EVERYTHING is war, and we should know better.

Today (July 31, 2005) there are very real wars being raged in the world. The Iraq War, although it is an unofficial and undeclared war (by US law), was launched partly in response to the terrorist attack on Sept. 11, 2001. When I think of a real war (which I’ve never been in), I think of the opening landing sequence of “Saving Private Ryan.” I think of psychological distress that lasts for tens of years after the original event, in the form of PSTD, homelessness and alcoholism.

I DON’T think of ….

  • the competitition in the business-place between WalMart and Sears
  • marital arguments that lead to separation and divorce
  • companies like McKinsey and Morgan Stanley trying to attract get the best employees from elite business-schools
  • a football, cricket, baseball, volleyball game, or any kind of sports game
  • Bush vs. Gore, or Seaga vs. Patterson, or Manning vs. Panday, Or Arthur vs. what’s-his-name
  • any kind of struggle against a behaviour or abstract mindset (e.g. drug addiction, premarital sex, values, crime or even terrorism)
  • spiritual conflicts between good and evil
  • words of disagreement between people on opposite sides of an issue
  • weed removal
  • spam
  • hemp
  • Lakota spirituality
  • obesity
  • poverty
  • ________________ (Fill in the blank with anything you feel strongly about)

In the world of excessive hyperbole that we live in, everything has become war, but only because we choose to see them that way.

War has a real, tangible and horrible effect on human life itself.

None of the other wars that we have “declared” have the same effect. We have used the imagery of warfare and the language of armed to conflict to try to raise urgency… it has become a failed method of manipulating the attention of others around us.

To believe the advertisers, pundits, CEO’s and political leaders, the average person is engaged in hundreds of “wars”, just by virtue of living an average life.

Obviously, this is absurd, even when the “war”, such as the “War on Terror,” seems to be justified. The average person is not engaged in a real war.

Even the so-called “War on Terrorism” has turned into a never-ending commitment to fear and suspicion. Think of it… can there ever be an end to a “War on Terrorism?” Terrorism is a method, not a political system, and any President who declares that the War on Terrorism has been one, will wake up the next day to some act of terror taking place in come locale around the world, even if the act is undertaken by his own security forces.

The truly sad effect of calling everything a war, however, is that we lose touch with the reality that war is. By using the word over and over in the way that we have, we have emotionally separated ourselves from the horrors of warfare, and subtly come to believe that it’s not a lot different from all the other things we declare as wars.

This is all an illusion of our making. Life is not war. Only war is war… war in the “Private Ryan’ sense is war.

Perhaps if we treated warfare with the silent gravity that it deserves, we could begin to be responsible for the other messes we have created in the world. Then we could begin to live up to the ideals first spoken by Emperor Salessie I.

*Selassie’s speech can be read in its entirety at http://www.bobmarley.com/life/rastafari/war_speech.html

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Customer Service Standards in the Caribbean

What is there to do about the general level of customer service in the Caribbean? Poor service on a daily basis has the effect of making life so much harder than it needs to be, in the form of late deliveries, don’t-care attitudes, hostile glares and rougher than expected tones of voice.

While we may talk and talk about the historical roots of low service levels, this kind of talk seems to do nothing except leave us resigned to a past that cannot be changed and a future limited by what we have inherited through centuries of servitude.

In other words, we are talking ourselves into thinking that things can never change.

On the other hand, it seems that our better tourist hotels, have found a way to provide service that is superior. For the purposes of this blog, however, I’d like to focus strictly on the service that we Caribbean people provide each other in our respective countries, rather than to outsiders or visitors.

I recently had the opportunity to visit a couple of banks in the region, in my vain attempt to open an account on a single visit. It was a vain attempt, and while the CSRs in the banks I visited were not rude, they made it clear that “they didn’t allow just anyone to open an account.” While they were not considering me to be a part of “anyone,” (probably due to my accent, questions and diction) they used that line to explain why there were so many hoops to jump through to open a new account. Also, at the end of the conversation, the polite CSRs (who felt more like gatekeepers), did not write down or otherwise record my name or contact information, even though I made it clear that I was looking for a new home for both corporate and personal accounts.

As a consultant, I’ve been part of many brainstorming sessions, in which executives wondered to each other: “Why don’t we have a greater share of customer’s deposit accounts?” and “What can we do to open more accounts and attract more funds?” Little do they know that their front-line staff is doing its best to discourage the general population from opening new accounts, under the guise of presenting an elite image. The reality is, that they thinking that they are doing the right thing.

This is pretty funny at some level – executives burning the midnight oil to try to figure out why their strategies to increase deposits aren’t working. The CSRs who I met with would be quite taken aback to be told that they were hard at work, taking actions to further a strategy that was directly opposed to the one that their senior managers were trying to fulfill.

The obvious question that you, the reader, are asking (and I’m guessing that you are probably a professional who has worked in the Caribbean) is why in the world would I try to open an account in that manner? Everyone knows that getting things done in the region is a matter of who you know, and who knows you. Why in the world did I not use my contacts to set up a meeting with the branch manager, who would show me the kind of service that I have become used to routinely receiving in North America?

Well, I do know better, but for the purposes of the project I was working on, I deliberately dressed in street clothes and did not use my contacts so that I could experience some of what the average person experiences. I also did not drop names, pull rank, ask to see the manager or any of the other things that we do in the region to distinguish ourselves as professionals from the “whole a di res’ ah dem.”

The truth is, there are at least three kinds of service in the Caribbean. Tourist Service, Friend Service and “Di Res Ah Dem” Service.

Tourist Service is self-explanatory. Friend Service is the kind that you extend to someone you either know, or want to know or are afraid might know you or even worse, might know someone important that you know. “Di Res Ah Dem” Service is the service given to the majority of people that you don’t know and will never see again, have no power and have no connection to you.

It’s funny to see how this works and to explore the variations on the theme.

Recently a friend of mine lost her passport. The first step was to fill out a police report, which we were assured would take at least 10 working days. After the police report was filed, it would take another 7 days to get the passport replaced. This was turning out to be a real problem, as her flight to return to the U.S. was only 7 days hence.

At first, the policemen and women were polite, but slightly dismissive. The low point came when we returned to the airport to be told by a policewoman in an entirely dismissive tone that “no-one had turned one in” as she gave us a blank look, apparently annoyed that we were interrupting her job standing-at-the-counter-doing-nothing.

Well, a day or so later we got a call from one of the policemen behind the counter (the one who had taken the statement a few days before.) He was actually calling to apologize for his colleague’s dismissive behaviour, and for the fact that he could not talk to us himself. I was amazed.

He went on to ask me if I went to Wolmer’s Boys as a high school student. I answered, “Yes,” and he asked me if I remembered him. He was a year behind me, and we then spent the next fifteen minutes catching up, even though I was driving through the hills of St. Ann at this point with a poor cellular connection. I hadn’t recognized him, to tell the truth (grey hairs and extra pounds have a way of warping one’s memory), but he was also calling to tell us that the report was finished and that we could pick it when we returned to Kingston. All in all, the entire process of getting the police report took less than 48 hours.

Not so amazing after all. I didn’t realize it, but he was giving Friend Service when I had been expecting “De Res Ah Dem” Service.

The same thing happened when I was dealing with another service provider, who I was referred to by a friend. He spent the first thirty minutes or so “qualifying me” which in the Caribbean means finding-out-who-we-know-in-common, an absolutely critical activity to perform before starting to do business of any kind. Once I was qualified by at least 5 points of common acquaintances, then his entire manner changed and only then could we start to really do business.

Having said all that, I’ve spent the last few weeks in US wondering what it would take to create an entirely new class of service for the majority of our Caribbean people.

It strikes me when I see my new wife struggle with Caribbean service levels (we’ve been to Jamaica and Trinidad together) that the only difference between the two of us is that she has higher expectations. As a customer in the Caribbean, I’m just glad that there is someone there in person (not on strike, doing personal errands, late because of the bus, the heat, thieves, rain, oversleeping, talking on their cell phone, etc.) She, however, expects that the service will be at the standard of the average North American retail establishment.

I was in a Staples store in Silver Spring this past weekend and happened to observe a cashier as I was approaching the check-out register. She had a bottle of Windex in one hand, and a rag in the other, and was carefully wiping down and shining her station as if it were her first, brand new car that had just gotten muddy. Where did she learn to do that? She was no older than 22, yet there she was, cleaning up her station when no-one was around to see her do it.

Was it a line in her customer service manual? Was she trained in how to clean her space? How could it come so naturally to her? Was she a born high-achiever? (I doubt it, given what I know Staples pays its entry-level workers.) Was she used to hard-work whereas our Caribbean people are not used to working hard (demonstrably false.)

I don’t know the answer but a couple of things struck me that I’m still thinking about.

One is that the average Caribbean CSR in the average store has never stayed at Sandals, SuperClubs or the Hilton. They have never seen or experienced Tourist Service, let alone the standard of service expected in North America. Instead, they are used to the customer service levels they have received at the roti shop, the patty shop and the burger joint (i.e. extremely poor levels of service.) In other words, they do not have and have never had a positive role model for the kind of service that makes customers want to return to buy the product just because the service is so good. Occasionally, they have experienced Personal Service, but that really doesn’t count (partly due to the inherent, reciprocal nature of that kind of service.)

The second thought is that we don’t even begin to teach customer service in schools to our students as a subject, even though a great many of them (I would argue that this is true of ALL adults) will at some point be working in a job or position in which the customer-supplier model will be critical for them to know and employ.

I can’t recall the last time I used geometry or algebra. Yet, something as basic as customer service, upon which business in ALL the tourist-oriented economies of the Caribbean depends heavily, is not even mentioned as a subject.

I could imagine in-depth training in the theory and practice of excellent customer service, including practical tests, written and oral tests as well as research projects. Students would be required to experience good as well as bad service, and to develop for themselves a way of relating to people in a customer-supplier interaction that works to the benefit of both parties. In our heavily service-driven economy, this could open whole new areas of opportunity for local business, and do wonders for out tourist product.

This alone would do wonders for our regional economies, and remove some of the unnecessary hardship that comes from going about doing our daily business. We actually do care about each other deeply, but it’s about time we showed it on a regular basis.

P.S.

It’s no accident that there have been so many times when I’ve been a customer, and yet I’ve ended up feeling like either a bad student, or a recalcitrant child. In the absence of role models, and in the absence of early training, I have a theory that a CSR goes to their past experience as a student and as a child, and tries to use that experience to deal with “De Res Ah Dem.”

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Holding the Company Hostage

In my work with Caribbean companies, one of the phenomena that I’ve noticed is that of “The Employee Who Can Not Be Fired.”

The Employee Who Can Not Be Fired?

Yes.

He/she deserves to be fired. Everyone knows it. Other employees may even be talking openly about it. They have developed elaborate routines to prevent themselves from being stuck working with the person. Only new, ignorant employees are assigned to work with them.

Their ineffective ways are legion, and the stuff of hallway conversation. Their failures are well-known, and well-talked about. They may never have stolen money, or attempted to defraud the company, so there is no way to call the police to let them do the dirty work (and they also can’t be idly threatened with that course of action).

In the Caribbean, there is considerable legislation that has been enacted to protect renters, and the laws make it very difficult to evict tenants, even when leases have long expired. Instead, landlords resort to all sorts of other means, some nefarious, but most involving social pressure of one kind or another to remove the unwelcome tenant-turned-squatter.

The employee I’m talking about here is basically a “cubicle/office-squatter”, and getting rid of them is extremely difficult.

One reason is that, once again, firing someone without documented cause in the Caribbean can lead to legal action, as the separation laws are written in favor of the employee. You can’t just get up one day and fire people for something like… Incompetence. In the eyes of the law, it’s just not enough.

(Whether this is a good or bad thing is beside the point of this particular blog.)

What keeps the squatter firmly in place, however, is an inability of executives and mangers to hold him/her to account on a consistent basis. Compound this inability with a deep reluctance to confront and the squatter is doubly protected. Add in a lack of adequate record-keeping by managers and human resource professionals, and you have an employee who will retire from the company with a pension. Only then will fellow employees breathe a sigh of relief.

Unfortunately, among those who are breathing a sigh of relief are several others who are in the same boat but don’t know it.

The consequences of this situation in most Caribbean companies are many: an increase in costs for companies, and a decrease in morale by employees.

Our companies are terribly inefficient when compared with the best-in-class, mostly to be found in first world countries. With the exception of our tourist product in some countries, customer care and customer service are abysmal (unless you know someone on the inside). More bodies are needed to do anything and everything — I once witnessed my friend move her small townhouse in Kingston using 9 men, when I know that a similar move in the US would take 2 or 3 at most.

Yet, the Caribbean worker living in North America is among the hardest working and most productive. How does this miraculous transformation occur? Is there some white magic that comes with a green card to “farin”? Or is that magic really based in fear?

Another downside of not firing the corporate squatter is that the excellent employees who are striving to maintain increasingly better standards start to ask themselves “A whey mi a kill miself fah?” (Why am I killing myself?) It appears to them that mediocre efforts are judged in the same way that strong efforts are judged, and the financial rewards, increased authority and better teams that are expected by the high performers do not come because the squatters are taking up valuable resources, space and time.

What does it take to create a new culture? Briefly, managers must be willing to make strong, clear interventions that shake up the status quo, and alter their programs and systems to reward those who take risks.

Also, oftentimes there is a dire need for training managers in the art and science of having effective feedback and coaching conversations. The paternal and autocratic style of management learned during slavery and indentureship is of no use here, but managers have seen precious few alternatives to either alternative that work.

The opportunity for executives and managers to improve how they deal with “The Employee Who Can Not be Fired” are tremendous. At the very least, managers need to take responsibility for the fact that the phrase “Can Not” really means “Will Not,” and that their inaction keeps the situation stuck in place.

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Illusions in the Workplace 1

Lately, I’ve been reading the book Communion with God by Neal Donald Walsch.

The author talks about the usefulness of illusions — 10 in all — that are part and parcel of the human experience. The illusions are actually meant for us to re-experience who we really are and who God really is, and life is about working through them and arriving back at where we started, i.e. the Truth. However, once we’ve come back home to the truth, we return with a new experience, which actually adds to what God knows of himself.

This is a powerful, grand concept.

Perhaps that same concept can be expanded to include the workplace, and that there are illusions that we maintain in the working world that are useful, but only to a point.

The First Illusion I’d like to explore is that of competition.

It is an illusion to think that out and out war exists between companies. In fact, there is far more cooperation than there is competition.

We are taught that business is about the survival of the fittest, and that companies are fighting with each other to survive, and that their focus should be on the destruction of their competitors.

Let’s look at some examples of what also seems like competition, but it actually a carefully crafted case of cooperation.

Athletic Competition

In sports such as boxing and track and field, at one levels it’s all about the competition between the competitors. Obviously, one person is out to “beat” the others.).)

Yet, in order to have a competition, until the boxers step into the ring, or the athletes step onto the track they must cooperate in order to allow the competition to proceed. They must show up at the same time and the same place. They must allow each other to train, and to do so with the best resources possible. They must follow the rules, even the seemingly meaningless ones. They better they are at getting people interested in the competition, the more tickets will be sold to the event.

In other words, they must cooperate to assist the other athletes in showing up as prepared as they can be to engage in the competition. Why?

To put it simply, a boxer needs an opponent. He or she cannot show up for the fight and claim victory when their opponent either fails to show or does so in poor condition.

Also, in the case of the athlete, he or she needs top class competition in order to do well, and to break records. Even if the athlete is good enough to break records on his/her own, no-one would show up to see them compete with themselves, and that would be the death of that sport.

Clearly, the destruction of one’s opponents is not in the best interest of an athlete, which is why competition only makes sense against a background of broad cooperation.

The same is true for corporations that compete in business.

Monopolies, or companies that have the least competition, are probably the most inefficient companies. They are despised the most by their customers (witness TSTT in Trinidad and other Cable and Wireless companies across the Caribbean, before the advent of competition in the cellular market). Their employees (anecdotally) appear to be the least motivated (after all, if you don’t like it here, then “tough luck” to you).

The demise of one’s competitors, or absence of the same is simply bad for business and leads to a propensity to fool oneself (no-one at Cable and Wireless believed that a competitor with no history in the Caribbean would gain 60% market-share in 3 years in the way the Digicel has).

It is much wiser to have competitors, and to foster their entry into markets, and to hope that they prosper. When there is broad cooperation, everyone can win, and do so at a much increased level.

In the airline business, it is an article of faith that one should never advertise one’s safety record or compare it against one’s competitors. Why so? The reason is that reminding the flying public that fling carries with it some risks, is a sure recipe to reduce overall flying, which would reduce the profitability of each airline.

Airlines, therefore, must cooperate in what they use in their advertising (even while not appearing to do so).

This is not to say that competition is not a useful illusion. It’s very useful when trying to serve customers better than the shop down the street. It’s useful in coming up with new ideas and product innovations. It’s also quite useful when it comes to treating stockholders and employees well — in some countries, awards are given to companies that are able to create extraordinary work cultures.

But executives need to understand that competition is actually an illusion, which exists to teach us an important lesson — there is much more to be gained from broad cooperation, and competitive impulses are only useful when everyone can remember this bigger truth.

An acquaintance of mine is an “ultra-competitor”. When she plays any board game, she plays to win, and if she loses she is prone to throwing nothing short of 4-year old tantrums (including cursing, stamping feet, throwing game pieces, etc.) The net result of this behavior is that no-one wants to play with her… She doesn’t get that competition is just an illusion, and that the real enjoyment comes from elsewhere.

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Gaps, Savannahs and Pens

Things that make you go hmmmm…..

Only recently, driving in Jamaica with my fiancee, she asked me about all the different “Pens” that we have in Jamaica.

You know… Tinson Pen, Faith’s Pen, May Pen, Androus’ Pen, Comma Pen, etc. She asked me what a “pen” is, and I told her that it used to be a place where they would pen up animals for sale. We have lots of them in Jamaica… and nowhere else that I can find.

Then, I was in Bim (Barbados) last week and heard of yet another “Gap”. Now, we have a gap or two here and there in Jamaica (e.g. Hardware Gap near Hollywell), but not as many as they have in B’dos, and we don’t have our Gaps in town, only someplace in the hills. They have the famous St. Lawrence Gap, Pickwick Gap, Alleyne School Gap, Gowdy Gap, South Gap, Carter’s Gap, et al..

It might surprise a Bajan to learn that we, in Jamaica, have only one or two “gaps” that we all know about. They’d probably think that we have a hard time getting around without the assistance of “gaps.”

In Trinidad the other day, my fiancee and I were liming with her father and his wife, and they pointed out a piece of what we in Jamaica call “open land,” but they referred to as “The Savannah.”

Now, this was no Queen’s Park Savannah. It looked like a piece of bush to my untrained eye. They explained that the developer of the area had carefully set aside the land to be a savannah for the neighbourhood — a purposely created piece of green, open space created for the enjoyment of the residents. They used to play cricket and football there, take walks, pick fruits from the trees, and maybe exercise horses while sipping tea and eating crumpets. You could almost hear the crunch of little children’s teeth as they bit into the crumpets (having never actually eaten a crumpet, I can only imagine, but they do sound crunchy).

But all there was left of that grand time was a piece of open land. An enterprising neighbour decided to capture a piece of it and placed her greenhouse on the property, in plain view, without repercussion or resistance.

It made me ask the question… how many Savannahs are there in Trinidad?

Well, it have the Queen’s Park Savannah, Aranguez Savannah, Mausica Savannah, Couva Savannah, Aripo Savannah, Caroni Savannah, and more.

In Jamaica, we only have Savannah-La-Mar – a town in the west of the island. In Barbados, they have the Garrison Savannah which looks huge, until one considers the Savnnah in Trinidad.

Why the difference? Who knows, but it does make me go Hmmmm….

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Designing a new website

I’m in the throes of designing my new website, and have been doing more and more work on the web as a result.

The explosion in blogging has been phenomenal since the start of 2005, as has the growth in the number of sites that are attempting to be “wiki” in outlook, if not in actuality.

These trends have made me rethink what a website is for, and how users can interact with it — it actually can have a “personality” that is brought to life in the way that the site is designed.

On my new site, I’ve created some new ways for visitors to interact with the ideas that I create. On one extreme there is this blog, which has new ideas in a rather raw form. At another extreme, there are standard-looking white papers and research reports. At yet another extreme, there is an open invitation to take me out for drinks, or a lime, so that we can share ideas.

Why this approach? I guess that I’ve been bitten by the bug of transparency and collaboration. When combined with a new commitment to give away and receive as many new ideas as possible, I’ve tried to create as many opportunities for sharing ideas as I can.

The truth is, that this approach flies in the face of the supposed “basic assumption” of business — competition for scarce resources between firms.

So what?

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Inspiring Action as a Manager

In thinking of what kind of communication or dialog a manager could have with his staff that would motivate and inspire, we have come up with the following:

  1. The manager must be speaking about something that is different (otherwise, why speak at all?)
  2. The change is best expressed as a change in thinking
  3. The kind of thinking before the change should be spoken in the first person
  4. The kind of thinking that is being done after the change should be spoken in the first person
  5. The content must reflect some new “zone of responsibility” that the manager is claiming

For example:

Manager speaking:

“I want to tell you about a new realization that I’ve had. We’ve been working hard on project A, but all the while I’ve been thinking to myself that it’s truly a waste of time. I finally decided to share my thoughts with my own boss, and he said that he felt the same way.

We talked for awhile and have decided not to kill the project, but to make some substantial changes with your help .”

Another example:

“For the past few years we have been talking and talking about the importance of customer service. Yesterday, in a conversation with a consultant, I saw that while I’d been talking up a storm, I had not been leading the company in way that would allow you to get the training that was needed to positively impact the customer’s experience. Well, now that I’ve realized this, I’ve decide that this must change, and I’d like to launch a new program…”

A contra-example in response to a Senior Management Approval rating of only 36%:

“I recently read the employee feedback survey, and I think that we have done some very good work that has gone unrecognized. We should not be so down on ourselves, and criticise ourseves so much. In fact, we need to focus on the positives and I’d like us to focus on some of the good things that have happened in the past year.”

The last comment is the most telling. A manager seeks to deflect criticism by using his position to add good things on top of bad,without telling the truth about his/her real thinking or emotions. The result is a communication that leaves people flat.

A manager’s job in any communication is not to seek praise, even if it is shared with others. A manger’s job is to give praise, and take responsibility.

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Using The Right Side of the Brain

I’ve had the privilege of recently working with some right-brained thinking experts — expert inventors like Scott Hilton-Clarke at Confida.

My first exposure to right-brained techniques came by accident. I read what I think was Tony Buzan’s first book on Mind-Mapping as a teenager, and have used that technique over the years to study for high school exams (CXC and A’levels), write papers, give speeches, brainstorm business opportunities, etc. The technique is useful for depicting the space around a problem or issue or question, and in seeing the space as a whole, and what I’m calling its “vibe.”

As an engineer deeply trained in the use of linear logic to solve problems, this whole approach is difficult to describe, but powerful in its effects. Peter Senge was one of the first to apply the idea of systems thinking to the business arena, and he spoke about the separation of cause and effect in time and space… although systems thinking could be used to fill the gap with essentially linear cause and effect chains of actions.

He pointed to the fact that there is more to organizations than meets the eye… hidden dimensions. And if you could see these dimensions, you could take an action in once place that would produce a result at some other place in space in time, and that others would not be able to see how the result could possibly be produced by taking that action.

Some sales trainers know that having a trainee clean up their desk, their car and their closets can help jump-start sales.

Forgiving an old boyfriend can lead to meeting someone.

Recently, I’ve been using more right-brained techniques to understand wholes, and to read spaces, and “see” and “hear” what they are saying. Of course, it’s not possible to “see’ and “hear” a space literally, but these are the best ways I know to describe what I’m doing when some internal antennae of mine is picking up information from…. a void.

For example, when one is entering a room filled with people, there is a “space.”

When one is in a Carnival band, say Poison, versus another band, say Harts, the “space” is very different.

While I have a relatively “new” antennae, I have found it becoming increasingly reliable, and I’ve been able to say and do things that make no linear sense, but do produce results I want to produce, much in the same way that balancing your checkbook allows an unexpected check to arrive in the mail.

There will be more on this later, to be sure.

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Un-confronts

Scott (my partner in crime) just came up with an additional insight — that un-confronts are a precursor to issues.

More on this later…

OK, it’s now later. A company I was talking with seems to have an executive team that is riddled with un-confronts.

Their corporate culture is a very polite and civil one, which is another way of saying that they don’t go out of their way to cause confrontation with each other. That’s another way of saying that they do whatever they can to not create a fuss, or an upset, and do their best to avoid getting involved in any way in anything that might “get out of hand.”

The result is like a married couple in which the husband and wife have learned not to talk about the things that might be upsetting. The short-term result is that there is no conflict.

The long term result is disastrous (this I know from first-hand experience! LOL) Important issues go unaddressed, which just means that they go underground as little seeds only to emerge later as scary, evil plants that consume the life around them. Yikes.

Anyway, these un-confronts have filled up the space between people on this executive team. This can be appreciated as more of an image, or a mental picture held only in the mind’s eye. Not a literal picture…. but something that is seen only from the right side of the brain.

Looking to fix certain problems in the organization takes seeing the situation with the right side of the brain, or in other words looking for and seeing the space between people in the company. Certainly, changing something like company culture or engaging in activities like team-building can be facilitated by seeing the space of the company.

One of the things to see is the space created by un-confronts.

Un-confronts don’t lend themselves much to left-brained techniques like adding up the number of them, putting them in priority order, assigning them a time slot in your schedule for resolution, etc. One can always do these things…. but they don’t make much of a difference.

Instead, we must look at the entire space, and tune into it’s “vibe” so to speak and act accordingly. In the case of this executive team, there are huge significant issues … yet. But there are un-confronts, which, as Scott says, are just the precursor to real issues.

I’ve been working with these executives to convert the un-confronts into opportunities — which is what good consulting is all about. Sometimes I facilitate a conversation, and at other times I consult with managers and coach them in how to be effective in conducting successful confrontations.